Persistence of innovation and firm’s growth: evidence from a panel of SME and large Spanish manufacturing firms

Persistence of innovation and firm’s growth: evidence from a panel of SME and large Spanish... This paper estimates the effect of persistence of innovation on employment in Spanish manufacturing firms during the period 1990–2008. Using GMM-system estimations, we study the importance of persistence of product and process innovation on employment growth according to the size of the firms. The results support that process innovation shows a positive effect on employment, especially for SMEs, while the effect of product innovation is not significant. The study also distinguishes that this effect appears in the contemporaneous year but it increases with the number of lags. This result confirms that compensation effects of process innovation may appear with a certain delay justifying the importance for SMEs of being persistent in innovation strategies to make them compatible with employment growth. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Small Business Economics Springer Journals

Persistence of innovation and firm’s growth: evidence from a panel of SME and large Spanish manufacturing firms

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Publisher
Springer Journals
Copyright
Copyright © 2014 by Springer Science+Business Media New York
Subject
Economics / Management Science; Management/Business for Professionals; Microeconomics; Entrepreneurship; Industrial Organization
ISSN
0921-898X
eISSN
1573-0913
D.O.I.
10.1007/s11187-014-9562-8
Publisher site
See Article on Publisher Site

Abstract

This paper estimates the effect of persistence of innovation on employment in Spanish manufacturing firms during the period 1990–2008. Using GMM-system estimations, we study the importance of persistence of product and process innovation on employment growth according to the size of the firms. The results support that process innovation shows a positive effect on employment, especially for SMEs, while the effect of product innovation is not significant. The study also distinguishes that this effect appears in the contemporaneous year but it increases with the number of lags. This result confirms that compensation effects of process innovation may appear with a certain delay justifying the importance for SMEs of being persistent in innovation strategies to make them compatible with employment growth.

Journal

Small Business EconomicsSpringer Journals

Published: Mar 6, 2014

References

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